Gemini Corporation Reports 2015 Second Quarter Results

CALGARY, Aug. 19, 2015 /CNW/ - Gemini Corporation (GKX-TSXV) announces its second quarter financial results for the period ended June 30, 2015.

Revenue in the second quarter of 2015 totalled $58 million, which was a 74% increase over the $34 million achieved in the second quarter of 2014. This brings year to date revenue to a total of $99 million compared to $62 million for the same period last year. The revenue growth in the second quarter was generated within the Field Solutions segment and was attributable to fabrication activity and the major rail loading terminal project that the Corporation has been completing for an alliance client. The current market uncertainties and lack of activity is creating extremely competitive pricing conditions that are taking their toll on margins and overall profitability. General indications from clients are that it is unlikely that pricing conditions will change markedly until there is a recovery in oil and gas prices.

Second quarter gross profit for 2015 was $0.3 million compared to $4.6 million in the same period of 2014 and the results for the year to date gross profit are $3.0 million versus $8.3 million, respectively. This significant decline is a result of unrecoverable costs incurred on the rail loading terminal project combined with the underutilization of staff and employment termination costs. It is expected that the margin compression being experienced throughout the industry will continue to constrain profitability.

The Corporation's 2015 second quarter net loss was $2.7 million (3.5¢ per share – basic) compared to the 2014 second quarter net income of $0.4 million (0.8¢ per share – basic). The net loss for the six months ended June 30, 2015 totalled $4.4 million (5.8¢ per share – basic) compared to a net income of $0.2 million (0.4¢ per share – basic) for the same period of 2014.

The Corporation has entered into a contract amendment for the rail loading terminal project. The completion date for the project has been extended to mid-September due to certain schedule delays, and arrangements to manage cost overruns have been agreed. The Corporation and its client are working together to manage and mitigate project costs. It is anticipated that there may be additional unrecoverable costs incurred prior to the completion of the project. 

The Corporation has taken steps to augment its working capital position through the recently announced sale and leaseback agreement for the land and buildings at its Ponoka, Alberta fabrication facility. The land and buildings will be sold for $5.5 million, less any transaction fees, and is expected to close before August 28, 2015.

"This year has been extremely challenging for our entire organization", stated Doug Lautermilch, Gemini's President and CEO. "The market conditions have been very difficult and compounding these challenges are the schedule and cost issues we have encountered on our largest project. Our focus is on managing the economic adversity we are facing and to position the organization for growth when the market begins to recover."

About Gemini Corporation
Gemini Corporation is a professional services firm that designs, builds and maintains energy and industrial facilities. We provide regulatory, environmental, engineering, fabrication, installation and maintenance solutions for clients through stand-alone or integrated service delivery models. Our design-build capabilities differentiate Gemini and provide value-added benefits for clients, such as cost certainty, schedule compression and one point of accountability. The Corporation's principal target markets are midstream oil and gas, oil and gas production, in-situ heavy oil, and oil and gas processing across western Canada.

Shares of Gemini trade on the TSX Venture Exchange under the symbol "GKX". For more information about the Corporation and its services, go to www.geminicorp.ca.

Gemini's 2015 second quarter report will be filed on SEDAR at http://www.sedar.com by August 21, 2015.

CONSOLIDATED FINANCIAL HIGHLIGHTS

Operating Highlights ($'000)	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2015		2014		2015		2014
Revenue	$	58,330	$	33,507	$	99,224	$	61,725
Gross profit	324		4,646		3,018		8,326
Income before interest & taxes	(3,325)		756		(5,485)		627
Net (loss) income	$	(2,677)	$	420	$	(4,444)	$	242
Earnings per share (basic)	$	(0.035)	$	0.008	$	(0.058)	$	0.004
Earnings per share (diluted)	$	(0.035)	$	0.006	$	(0.058)	$	0.003

Financial Position Highlights ($'000)	June 30,		December 31,
	2015		2014
Working capital	$	14,799	$	19,635
Total assets	64,860		65,342
Shareholders' equity	26,543		30,712

Disclaimer

This news release may contain forward looking information that represents Gemini's internal projections, expectations, estimates or beliefs concerning, among other things, the timing of any recovery in oil and gas prices, timing for the completion of the rail loading terminal project, the extent of the cost overruns and additional unrecoverable costs relating to the rail loading terminal project, expected closing and closing date of the sale and leaseback transaction with 1735465 Alberta Ltd., the recovery of the markets for the Corporation's products and services, future operating results and various components thereof or Gemini's future economic performance. All statements other than the statements of historical fact may be forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expects", "projects", "plans", "anticipates", and similar expressions. The projections, estimates and beliefs contained in such forward-looking statements are based on management's assumptions relating to Gemini's performance and competition within the sectors in which it competes, the continuation of the current regulatory and tax regimes in the jurisdictions in which Gemini operates, and necessarily involve known and unknown risks and uncertainties, including risks and assumptions relating to client service demand, field service costs, labour rates, and other factors that may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted or suggested. The Corporation does not undertake to update any forward-looking information in this document whether as to new information, future events or otherwise.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

SOURCE Gemini Corporation

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